Flipkart closing in on $330 million deal for Myntra merger: Report

One of the biggest stories in the Indian e-commerce space has just got more legs. We have been hearing murmurs of a Flipkart-Myntra merger since January, but talks have been slow between the two online retail giants since then.

TechCrunch reports based on information from sources within Myntra that the board had started taking investor approval last month. The deal would value Myntra at $330 million, while Flipkart has a valuation of $2.5 billion, one source told the website.

The two companies have been in talks to merge their businesses in the light of Amazon’s expansion of its marketplace services in the country. Secondly, there’s pressure on existing players as Walmart’s entry into the Indian e-commerce market is imminent. Then there’s eBay, which is backing Snapdeal and its own marketplace in India. So one can see how a merger of two of the biggest players could hand them an advantage. It also helps that both companies have common investors in the form of Accel Partners and Tiger Global

While in recent months we have seen Flipkart make a big push towards online fashion retailing, especially with ad campaigns speaking of fashion stores, it has not been able to crack the segment like Myntra. India’s online fashion retailing, where Myntra is the market leader has been valued at $559 million in 2013, double its valuation from 2012. So it’s one of the fastest growing sub segments. As we know Myntra raised $50 million in funding in February . Premji Invest is among the private investors and said to have pitched in half that amount. TechCrunch says this investment is set to double post the Flipkart merger.

According to estimates, the Indian e-commerce industry is set to see a massive spike in the next five years. It’s expected to rise to around $22 billion in the nest half decade from the existing $3 billion, valuation. In comparison, China’s e-commerce are approaching $200 billion, so while the growth in India is commendable, it has a lot of headroom, especially as more citizens come online.